No doubt, humans possess the most evolved brain and are the most intelligent species on the planet earth. But still, they are exceedingly vulnerable to risks and exposed to numerous threats throughout their lifetime. As humans, we are neither equipped to foresee the future nor acquire powers to predict it correctly. So, the best thing which we can do for ourselves is to insure or safeguard ourselves from any specified contingency.
Insurance is a legal contract between two parties, namely, an individual (insured) and an insurance company (insurer). Insurance companies have to lawfully repay a partial or full amount in return of the premium deposited by the insured. The insurance company signs a pact and ensures to bear financial losses and reimburse the money in case of an eventuality. Insurances help in covering losses and controlling risks. It also provides pieces of evidence of financial resources and meets legal conditions.
Jack Ma, a Chinese magnate, and an investor says, “Buying insurance cannot change your life, but it prevents your lifestyle from being changed”. When you are buying insurance, the premium you pay may be minimal, and it may not upset your pocket at that time. But, if you don’t buy, then you are putting your family or loved ones in more significant trouble. Generally, while purchasing insurance, you end up paying very less amount of premium for insurance cover. As very less amount of people claim protection in the end. So, the company takes the chance of returning a specific sum when claimed by the insured person.
India Brand Equity Foundation, a trust established under the Ministry of Commerce and Industry, has reported that the insurance industry in the country is expected to reach USD 280 billion by 2020. The expected growth rate for the life insurance industry is 12-15% annually for the next 2 to 3 years. The insurance industry is growing, and our government is taking necessary initiatives to boost it and pushing the schemes into the population. Sixty-eight insurance companies are operating in our country as of March 2018. There are eight public insurers, and 60 of them are private insurers as per the annual report of the Insurance Regulatory and Development Authority of India (IRDAI).
Coming to the question, what are the insurances that one can have by the age of 30? As we have understood that insurance providers have a primary job of protecting you and your family. So, it is ideal for getting the right kind of insurance policies for yourself or any of your assets for financial security and prohibiting monetary losses.
Mostly, this age is a transition phase where the majority starts a job, and, most importantly, manage their finances. Being a responsible person, you can make wise investment decisions at the nascent phase of your career. This, help you shield your family and your old age. You have enough time to witness the power of compounding and generate returns and create wealth along with preparing your family against inevitable accidents.
This article aims to suggest some of the insurances that could be bought by the age of 30. Also, a list of top 10 life insurance companies in India 2019 and the best general insurance companies in India 2019 are given for your reference. Here are a few options:
This is the most popular type of insurance policy availed by the public. To ensure that your family and loved ones live a financially secure, safe, and peaceful life in case of any eventuality (maybe an accident, disability, unfortunate death), you should consider buying a suitable insurance policy that can provide coverage to the dependents.
The policyholder agrees to pay the insurer a certain premium after the insurer determines the cost of insurance (COI) and fees required to maintain the policy. Various factors such as age, medical conditions etc, contribute to zero in on the premium amount.
Once the policyholder agrees to pay the premium, the insurer is committed to paying the amount to the nominee or the insured. In case of the untimely demise of the insured within tenure, the benefit is offered to the nominee. Otherwise, on the completion of the full term, the insured receives the maturity benefit along with a bonus.
Also, many people are not aware of the discount on policies when bought online. The range of discounts varies across companies. It is because administrative charges of the companies are limited when the premium is paid online. Additionally, if you use online mode, you can buy and renew your policies without any insurance agent, thereby omitting commissions.
The best part is that life insurance policyholders get tax benefits. They are eligible for tax deductions on the premium paid under section 80C of Income Tax Act, 1961. Also, under section 10 (10D) of the Income Tax Act, an individual is exempted tax on the maturity benefits of life insurances.
Indian insurance industry categorizes life insurance into mainly two categories, which include pure life insurance and insurance cum investments. Pure life insurances include the term, whole life, money back, and endowment policies. Unit linked Insurance policies (ULIPs) come under the insurance cum investment category.
A policyholder can choose a suitable policy according to his requirements, risk cover, charges incurred, discounts, and the advantages it offers. According to data reported in The Economic Times, IRDAI recorded a rise of 15% in the collective new business premium income from INR 17,490.68 crores in September 2018 to INR 20,056.70 crores in September 2019 and LIC showed an 18.37% rise in its new premium during the same time span.
In the annual report published by IRDAI, a detailed account of individual claims paid by different life insurance companies in the financial year 2017-2018 is given. Here is a list of top 10 Life Insurance companies in 2019 along with their claim settlement ratio.
|Name of the company||Claims paid as % of policies|
|Life Insurance Corporation||98.04%|
|Max Life Insurance||98.26%|
|TATA AIA Life Insurance||98.00%|
|ICICI Prudential Life||97.88%|
|HDFC Standard Life||97.80%|
|Bharati AXA Life||96.85%|
|DHFL Pramerica Life||96.62%|
|Aditya Birla Sun Life||96.38%|
As the name suggests, term insurance plans provide coverage for a fixed period (varies from 5 to 40 years for single premium) to the policyholders. This depends upon the different plan options to suit their requirements.
They are quite popular as they are affordable life insurance plans and offer maximum life coverage against low premiums during the specified term. They provide financial security to the family members in case there is any sudden mishap or accident involving the policyholder.
If death occurs within the specified time, the nominee is granted a lump sum amount, also known as the death benefit, which was chosen at the start. Some insurance companies take care of your family by providing supplementary income in case of disability or illness. But, if death occurs after the termination of funds, there would be no payout. However, policyholders can extend or renew the coverage with different premiums or let go of the insurance completely.
These plans offer another crucial salient feature of a limited payment option. In a term plan, initially, the premium is paid for a limited time. Still, coverage continues for a more extended period, thereby allowing you to save a part of the premium amount. These plans also provide tax exemptions under section 80C and section 10 of Income Tax Act, 1961.
If you have managed to get a house for yourself by now, then home insurance is a must for you. Firstly, in case you took a loan to build a home, then you have to provide documents in the bank to prove that your property is insured.
For the protection of the outer structure and the interiors and the content in the house, you need home insurance. This policy compensates for any damage or destruction to the house, including natural or human-made.
The insurance also helps and provides cover to rebuild your house. Some losses which are covered under home insurance include fire breakouts, robbery, and theft, explosions, malicious damage etc.
A sedentary job or lifestyle has given rise to new age lifestyle diseases which are predominant amongst us. These diseases, if not checked, can lead to severe health disorders in the future.
There is a considerable rise in the cost of medicines with the pharmaceutical and healthcare industry multiplying as people are ready to pay for good facilities. It’s better to insure yourself beforehand, instead of bearing substantial expenses which are very difficult to afford. New plans for health insurance provide other benefits apart from acute hospitalization.
Other features of a health plan include maternity services, daycare procedures. Many non-hospital services are also included in a comprehensive health plan.
One of the foremost reasons for choosing a health insurance plan earlier in your life is because there is a sharp jump in premium with the increase in age. The premium you pay when you are under 30 is much lower than what you have to pay when you are older. So, financial experts advise investing earlier in your life to acquire maximum benefits for the same policy dispensing lower premiums.
In a significant boost to the Indian Government health insurance industry, the Government of India launched the National Health Protection Scheme under Ayushman Bharat to cover over ten crores of poor and vulnerable families. This scheme will provide coverage of up to INR 5 lakh per family per year. There will be approximately 50 crores beneficiaries under this scheme. It’s the central government’s one of the most anticipated flagship health schemes. This helps one to avail benefits from both public as well as private, enlisted hospitals.
The first thing for a new job holder is to earn sufficiently to accommodate a comfortable lifestyle. However, the very next thing he considers doing is to buy any vehicle for safe and convenient travel. Travelling daily to the workplace or for personal chores is an inevitable part of life. In our country, it is mandatory to have motor insurance irrespective of the type of automobile you use for driving on roads. Driving on roads comes with its shares of risk and danger. Motor insurance can come to your rescue, where this insurance cover will provide you protection against any damage or loss.
Now, let us understand about types of car insurance in India. The first one is third party insurance coverage. This insurance policy is compulsory for all and covers any damage to the property of the third party. The second one is a comprehensive insurance policy, which along with protecting the third party’s vehicle, secures your automobile too. The third type of car insurance includes coverage for the owner of the vehicle, the passenger in the vehicle, and the third-party. This type of insurance is known as a package policy, which safeguards your vehicle against any natural or human-made adversity.
While one is emphasizing on fulfilling the short-term needs, one shouldn’t neglect many long term necessities. One of the crucial targets should be building a retirement fund. When you are young, you can work hard and fulfil your obligations. On reaching the retirement age, you need some savings for looking after yourself while maintaining a healthy lifestyle and paying your bills. The earlier you invest in insurance, the more profitable it is. The power of compounding will help you generate achieve constant cash inflow during old age.
These insurances would help you be happy and protected. Insurances are for the worst times. And before you secure your worst times, make sure that you take a very calculated and well-informed decision. Make sure that you choose the insurances wisely and judiciously. Make the most of your money.